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tv   Mad Money  CNBC  December 21, 2009 11:00pm-12:00am EST

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i'm jim cramer, and welcome to my world. you need to get in the game! >> go out business and he is nuts! they're nuts! they know nothing. >> i always like to say there is a bull market somewhere. "mad money." you can't afford to miss it. hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends. i'm just trying to make you some money, and i'm trying to entertain and educate. give me a jingle, 1-800-743-cnbc. this is the kind of day that makes you glad to be an investor. ♪ hallelujah >> the kind that makes staying in the game so worthwhile. >> all aboard! >> dow closed up 85 points. s&p gained about 1%. and yet i am sad.
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i am sad -- [ crying ] -- about this terrific rally. i am filled with sorrow, because i know that so, so many of you didn't participate in this rally. the rally has been going on for months. since on the whole people are getting out of, not into stocks. despite all the possibilities we saw today, which begins, by the way, as i told you in friday's game plan, the era of good feelings towards stocks when the market is up huge. what makes this rally so bittersweet? as i finish up the book tour for getting back to eden, boo-yah! one thing has become abundantly clear to me. people no longer believe in stocks. they are no longer trusted. often they are no longer seen to be a legitimate asset class
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after what we have gone through. every day that i sign books -- did some this morning. what did i hear? fears, fears that stocks aren't safe. and then it's reckless to keep your money in them. even after the amazing historic 61% rally from the bottom in march. ♪ hallelujah oh, it gets worse. i read in usa today this morning that money is still pouring out of the stock market, and into bonds! $9.6 billion pulled out of stock funds. $50 billion into bond funds, just since the end of october. this is wrong, ladies and gentlemen! and i'm not just saying that because i'm a stock market televangelist. oh yee of little faith, tonight i'm going to restore your confidence in stocks as safe investments for the long-term. how am i going to do that? one word. dividends! those of you who are putting your money into cds or bonds, listen up.
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you think you're doing the safe, responsible thing. i think you're being absolutely reckless! the return on a one-year cd for most banks about 1.5% right now. that's incredibly low, even with the federal reserve saying rates will be kept low for a long time. well, it's going to stay that way. bond funds? bond funds? right now 10-year treasuries yield 3.68. that's much less than you can get from secure high-yielding stocks, which also offer you the possibility of capital appreciation and dividend raises, two things you're certainly not going get if you own bonds. so here is how i call it. if you want to try to protect your money, if you want a source of income, if you want to make a secure, smart investment, you need to forget about cds, forget about bonds, and put your money in a place where it can really work for you. in high-yielding stocks. >> buy, buy, buy! >> that have recently raised their dividends.
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you know the first theorem of investing luminary shakira, that it's now in the cannon it's been so long, that dividends sometimes disassemble. but a company that can raise its dividend, that's something you can hang your hat on, something you can get behind. which is why just before the holidays we're taking this time this week to celebrate the companies that have raised their dividends this december. [ applause ] you know what? i was thinking this weekend while i was down at the eagles game that there is a developing shakira corollary from no doubt a woman signs her name with a dollar sign for s, i'm talking keshia. ♪ ♪ the party don't stop, no >> tick-tock on the clock, but the dividend party don't stop. which is clearly what he is meant to say. and in an otherwise quiet
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erudite. you can own high-yielding stocks. i'm going to get to the individual names after the break. but for now, why don't we do this. let's look at the yield that lets you own a broad spectrum of stocks. i'm talking about the black rock dividend achievers trust. here is a symbol, bvd. this yield 7.4%. this is a net asset value trade. if you pay up for this, you're really dumb because it's just going ride back down. it's just a bunch of stocks. it's more than twice what you would get from treasuries. remember, dividends are only taxed at 15%, but your income from bonds or cds could be taxed as high as your income rate, 35%. and that's going up. and that's not only the reason why we like them. for those who fear stocks, who
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worry that this rally and live in fear of the crash that was savaging so many of your 401(k)s, dividend stocks have great if you know how to analyze, which is what i instruct in "getting back to eden." remember, a dividend gives you what is called a parachute, or at least a cushion. that's a bond fund. maybe even a trampoline? because the stock prices decline, its yield increases. that's right. dividend does the same. so the yield increases make it more attractive. this is called yield support. it's one of the best reasons out there to own dividend stocks. on top of all this, stocks with high dividends i think are about as immune to short sellers as it gets. someone shorts a stock, they have to pay for the darn dividend. the bigger, the more they have to pay. they pay, they short the stock, they have to borrow it, and they
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have to pay the dividend to the person they sold it to. and they hate having to pay the dividend the person they borrowed the stock. from they hate doing that. because it eats into their profits. most important, though, we buy dividend stocks with an eye toward owning them forever, provided they can keep up their payouts and raise them. these stocks represent fabulous long-term streams of income. that's why over the last 80 years, reinvested dividends account for 40% of the return from owning stocks. yeah, you heard me, 40%. if you reinvest your dividends and allow them to compound over time, something i stress the importance of in "getting back to eden," you've got an investment for the ages that could produce incredible returns, even if the stock price goes nowhere. with the achievers trust i mentioned before, that 7.4 yield will allow you to double your money in nine and a half years. even if the fund went nowhere, it would take over 20 years for you to get the same return from treasuries. and the best of high-yielding stocks, the ones i'm going to feature later tonight. remember, as the dividend goes up, the short sellers have to
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pay the dividend. a dividend boost is just about the most important sign a company's management can give you about the strength of its business. here is the bottom line. don't be scared of stocks. it's downright irresponsible to invest in bonds or cds right now when there are a plethora of high-yielding stocks that can give you higher yields with the possibility of upside and dividend raises, two things you will never get from a bond or a cd. stick with me to hear my favorite dividend names. the dividend razors after the break in the first installment of our series where we salute those who give the gift every three months, tick-tock, long after the holiday season is over. let's go to illinois, please. >> caller: professor cramer. >> how are you? >> caller: not bad. real quick, in the season of thanks, i'm thankful to you for
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getting me in a one, two, three, visa, pbr and apple, boo-yah! >> you are terrific, some of my faa absolute favorite stocks. i only wanted citigroup on the equity offering. that's come and gone. what's up? >> caller: i know the critics will give you credit. you taught us high value for the certain stock can be the truth meter for where it's headed. >> right. >> caller: therefore, can we use the volume in the markets as an all to be an indicator where the market is headed? >> not for the whole, no. friday we had huge volume, but it was related to a quadruple. the volume has been low this whole time. it's one of the problems that a lot of people has missed is that the volume is so low that they don't trust the market. you can move millions of shares at any price. let's go to bruce in pennsylvania. bruce? >> caller: hello, jim! boo-yah and happy holidays. >> same to you, bruce. thank you very much. how can i help? >> caller: jim, i've been following your show for a while. i know you have been pushing them a lot. >> yes.
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>> caller: i had picked up two stock, win strom and enterprise product. and i'm wondering that after i buy these stocks, they've actually had a good run where they're going up 10 to 20% for my purchase price. >> right. >> caller: i'm wondering if it's time to take profit or hold on because i am looking for the income? >> let's take the case of enterprise products was up a dollar today. in the end i don't have a lot of places to get 7% yield. as long as the situation they can keep playing that yield until it gets to 5-4, i want you to hold on to it. that's what i want to see, bruce. thank you for the nice words. hits like dividends don't like. instead of investing in bonds or cds, consider a dividend-raiser. my first three dividend picks for the month of december. "mad money" will be right back. >> coming up, dividend and conquer. cramer has three stocks for your portfolio. could they be gifts that will keep on giving?
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and later, with mad cast heating up, going one-on-one with range resources ceo to find out what is next on the executive decision. plus, food for thought. will tree house foods' most recent acquisition create value for the stock? cramer goes one-on-one with ceo sam reed to find out. all coming up on "mad money."
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i am on a jihad against the false security of bonds and cds.
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i'm not saying they're not safe. i'm saying you could lose some of the gains that you have versus other things that you could do if you're in bonds. and cds obviously will pay off, but at a very minimal amount. and yet people are pulling money out of the stock market and putting into these safer investments. i'm telling you that's wrong. they're safer like this. i don't think that they're that prudent right here, not with these low yields. see, if you're looking for income, for the kind of investments that let you sleep soundly at night because you're not worried about being beaten by inflation. instead of staying up until dawn worrying yourself silly on the dirty linoleum floor, or even cheap scotch is too expensive? you invest for the future. and the assets that are the best future, particularly against inflation are stocks, not these bond funds, with high dividends. stocks with high dividends, or the stocks of companies that are serial dividend raisers. that's why all week we're going profile our favorite dividend
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names. starting with thee tonight, general miles, pfizer and at&t. stock with superior dividends. a law cramer as steven seagal as steven storm in "hard to kill." an underestimated performance. general mills is a solid defense play. this one is a cereal dividend raisers, not to meant a cereal outperformer. it's okay that it's crooked. pfizer is a mid-yielder in the midst of one of the greatest turnarounds that i have seen in a long time. a huge transformational acquisition of wyeth. at&t is a high yield that just won't quit, rallying higher and higher despite endless reports of problems with its networks. i'm going to explain why we like each of these, and show you how to analyze them as stocks, something i do in far greater
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detail in getting back to eden. consider this a tease or a free perfect of the perfect gift. general mills. with some of the world's best loved brands, cheerios, wheaties, betty crocker, lucky charms. this stock is a real lucky charm because it has a great quarterly dividend which it just raised a week ago from 47 to 49 cents a share. this is on top of a 4% dividend increase in june. two dividend boosts in six months? an incredible show of strength. and i say hallelujah! ♪ hallelujah >> when it comes to raising its dividend, that's management saying listen, pal, we've got the growth, and we believe things are getting better. even better. that's pretty impressive from general mills, given this company's beat the meter street's estimates. it's been whipping them. seven out of the eight last quarters. ken pal, what a great ceo. with a yield that company may not seem that impressive. wait a minute, jim, that's not a big dividend. wait a sec.
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general mills yields slightly more after taxes, 2.4 than ten-year treasuries which are taxed at the highest tax bracket. taxing ordinary income i should say. the thing you have to remember is that general mills raises its dividend regularly. now i want you to go in the way back machine. suppose you bought the stock ten years ago when it was trading at $26.15. in that case, it's yielding about 7.5% off the original base. that's the future value of owning a dividend-raiser for the long haul. when it comes to dividends, what do we question? we have to use the olivier question, so poignantly posed in "marathon man." it is safe? with general mills, it's as good as they come. 2.3 times per dividend payout per share. getting back even when the earnings are twice the earns or more, that's the gold standard for safety. how do you collect the dividend? a lot of jargon here. people throw it all the time.
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the dividend, the record date, no. you only need to know one thing. you need to own the must-own date. the last day when you have to buy a stock in order to claim its next dividend payout. the must-own date is the day before the x date for general mills. write this down. you want to be in, the next own date is january 6th. how about pfizer. oh, boy. i had hated this big pharma name until its game-changing $68 acquisition of wyeth that is going to create $4 billion in cost savers, substantially broaden pfizer's pipeline and i really liked wyeth. i wasn't a fan of pfizer, but together it's killer. the deal close. pfizer yields 3.9% from 16 cents a share to 18 cents on december 14th. 12.5% increase. this comes after the dividend had been cut in half. they slashed the dividend in half. earlier this year, shortly after pfizer announced the wyeth acquisition.
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pfizer expected to pay out $46 billion in dividends. the company throws off that much cash, it will still be able to pay down $34 billion in debt with $28 billion in left over. it's an atm! given the health care reform has been totally watered down, thing stock has a lot more room to run. again, i've been extremely critical of the stand-alone pfizer and got you out ahead of the dividend cut. but now the dividend is starting to be raised again. i take notice and want to jump right back in. for those who feel like this isn't a good enough stock, bristol-myers squibb after close tonight raised its dividend, i like bristol-myers squibb too. as for protection for pfizer, it will generate enough earnings to cover its dividend three times over. must-own date for pfizer february 2nd. finally, best for last, i think. at&t. which just last friday boosted its quarterly dividend by a penny to 42 cents a year, giving it a juicy 6.1% yield.
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at&t is the conservative way to play the mobile internet tsunami. it's a big telecompany. it has more exposure than the competitors. why? it is actually big enough to move the needle of a company like at&t while it's not going have the growth of an apple. but because of the company's brilliant decision to be the iphone's biggest distributor without ever having look at the iphone is pretty amazing. it's more exposed than any of the other wireless carriers. the phone business, the growth in the economy. i like their video initiatives which are really gaining attraction as well. must of own date for at&t, january 5th. and don't worry, the company has far more than enough cash flow to keep raising that pay up. tonight we're celebrating the gift that keeps on giving. dividend-paying stocks, ones that have just raised the dividend in december. cereal like general mills, pfizer, and at&t. remember bristol-myers did it after the close.
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i want you to try one of these three dividend boosters instead you. could get some capital appreciation and some capital raising of dividends that could make you one happy investor. let's go to terry in florida. terry? >> caller: hey, sunny clearwater, florida, boo-yah to you. how are you? >> not bad. how are you, sunshine? >> caller: i'm doing great. and i would like to thank you from getting the small investor from getting skinned alive. >> i was a small investor. how can i help? >> caller: i appreciate it. i really do. and so does the rest of the company. jim, altria is my favorite dividend tech. where does it sit with you? >> this is almost up to 20. this is one of my largest possessions. altria i think it is a serial raiser.
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you can take that dividend and go set up an anti-smoking clinic. my first three dividend picks, general mills, pfizer, and at&t. stay tuned this week for far more dividend raises and stay tuned to "mad money." coming up, with nat gas heating up, cramer is going one-on-one with range resources ceo to find out what is next on the executive decision. and later, feel the thunder approaching as jim takes a full-on blitz from cramericans everywhere. >> boo-yah! >> can he handle the pressure on a flash-fire lightning round? plus, food for thought. will treehouse foods' most recent acquisition create value for the stock? cramer goes one-on-one with ceo sam reed to find out. all coming up on "mad money."
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>> i'd like to introduce you to a finger mime. >> but warning, he talks back. >> boo-yah! >> couldn't have said it better myself. >> are you ready, skee-daddy? >> order cramer's new bobblehead today. >> buy, buy, buy! >> at cnbcstore.com. welcome to the now network, population 49 million.
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sprint. the now network. deaf, hard-of-hearing and people with speech disabilities access www.sprintrelay.com you know we have always been huge advocates of natural gas on this show. but for a long time it seemed like to show was just a lone voice. crying out in the wilderness about the need for natural gas as a national bridge fuel. we think all that changed last week after exxon added its voice to ours, with its $41 billion acquisition of xto energy. it's one of the best natural gas companies out there. now we expect more oil companies to follow in exxon's footsteps as they realize the huge potential natural gas has in this country. so last week we went looking for the next xto, the company that looked most like it. and one of the names we came up with was range resources, rrc. which we like for its low
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finding cost and conventional shale assets in the marcellus and barnett shales. it could drive another company to buy a natural gas-based company. what is the logic? if we adopt natural gas as a fuel and start using it for transportation like so many other countries do, with cars and filling stations that use compressed natural gas, at least trucks, americans could save at least 400 million gallons a year, vastly decreasing our dependence on foreign oil and helping to right our balance of trade because we would be sending fewer dollars overseas to pay for crude. natural gas would save their drivers between 70 cents and $1 a gallon, simply because compressed natural gas is cheaper. and even at that price the dealers would be making far more money than they are now. plus, natural gas is cleaner,
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with 30% fewer carbon emissions than coal or oil. 50% fewer than oil. so we're sitting on top of oceans of it. so building out infrastructure would be a huge job creator. that's the case for natural gas. what about the case for range resources? here is a company with 2.7 trillion cubic feet of reserves, trillion, which are 86% natural gas, similar to xto. and a big reason why we think this company could be a asset for any big oil player looking to implement a compressed natural gas fuel company. the potential resources are between 21 and 28 trillion cubic feet of natural gas with most of that potential in the marcellus shale where range resources has the second most acres behind chesapeake. company could quadruple the production in marcellus and expects the rate to double once more by the end of 2010 and double yet again in 2011. range is a low-cost producer too. the fining costs in the
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marcellus shale come to $1.16 per cubic feet. in the barnett $1.14 per cubic feet. in the norfield, virginia 88 cents. we think range resources could be a great investment without a takeover. we don't need to have a royal dutch moving out of the unsafe nigeria and moving into the totally save west virginia for this to work. which is why we want to dig deeper to do the extra homework and talk to john pinkerton. mr. pinkerton, welcome to "mad money." >> thanks, jim. thanks for having me. >> sure, sir. do you think it's a game changer for your industry? >> absolutely. you know, you've got probably one of the smartest acquires in our business making a huge bet, $41 billion on natural gas. i think it tells you a lot. >> do you think that either congress or the president is beginning to recognize the technological changes that make so it natural gas could be our bridge fuel?
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>> jim, i've spent some time in washington lately. and i think they're starting to get it. you know, it's just been the last four or five years where this revolution in the natural gas has really come about in terms of the shale plays. and quite frankly, it's taken us a little while to get out there and talk to washington. but i think we're starting to have a big impact. >> are there still people who believe that this fuel which at one time was considered unreliable is still not available in the quantities that they want to do long-term contracts? >> yeah, there is some. you're always going to have nay sayers. but more and more people are starting to understand that there is more technical data out there supporting that. just the fact that we've been able to drive up production and drive natural gas prices down i think is a huge validation of that point. >> how come you're able to find natural gas for so low prices? apparently even under a dollar at this norfield? >> it all comes to technology. the biggest user of technology other than nasa is our business. and this is trying to find natural gas. we use enormous amount of technology.
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we've always known there was a huge amounts of gas in the shale rocks, but we couldn't -- didn't have the technology to get it out. now with the advent of the barnett shale and everything we have learned through that, now >> absolutely. it's technology that we've developed through the barnett shale and along with the service companies. this is american know-how. it's a combination of american know-how, working hard and good ol' fashioned technology that was created in places like nasa and some other science labs across the nation. >> we talk about employment on this show and what it would do. if you had a nationwide commitment to using natural gas in trucks and cars, how many people do you think would need to be put to work to drill
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enough and build the pipe enough to make it a rational choice? >> in pennsylvania, obviously, where you're very familiar with, just next year alone we're going to add we believe somewhere around 98,000 jobs just from the marcellus shale alone, you know, about $14 billion economic stimulus. you know, that is incredible. and the other thing, jim, i think is really important. these high-paying jobs. this is well above the minimum wage. and some of them, we've got lots of phds running around in our pittsburgh office. but we've got a lot of field people. and it cascades down into the construction business, down into the hotel business, restaurant business. so really has a huge impact on these communities that we're in. >> now i know that there are a bunch of environmentalists. and look, i'm an environmentalist. i was sierra club at one time. i was -- well, i was greenpeace, okay. but there are a lot of people who feel that there are at least in the headlines, that there is water risk here. have you identified a lot of
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water that has been contaminated by this process? >> jim, there has been just enormous amounts of studies. there was one done by the d.o.e. in 2004 that, the groundwater council has research as late as 2009. there is a big report they wrote. a big thick report. there hasn't been one substantiated claim where hydraulic fracturing has had any impact on the groundwater. >> can it still stop you, then? they're holding hearing. heaven forbid they hold hearing about job creation. they're holding hearings about whether you're ruining the pennsylvania water supply. >> we're a very transparent company. we're out there talking to these congressmen and talking to all the environmentalists we can talk to. my theory is let's get it out on the table. let's look at the research. let's look at the data. and i think most americans will agree. you know, this is the way to go.
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the department of energy, environmental protection in pennsylvania has overseen the drilling of over 200,000 wells in that state. >> right. >> and there is not one reported case of groundwater. let's go talk to them. let's hear what they've got to say. >> i agree. john pinkerton is the chairman and ceo of range resource. you're one terrific guy, and you've got one terrific company. thank you so much for coming on. >> thanks, jim. you need something in your portfolio after what happened to xto. a lot of people have been saying to me, jim, where do i roll my profits from xto? when i had by michigan book signing, a dozen people say i have to go what to do. range resources could fill that. coming up, try to keep up with cramer as he takes your calls rapid-fire in an all new lightning round. plus, food for thought. will treehouse foods most recent acquisition create value for the stock? cramer goes one-on-one with ceo sam reed to find out. all coming up on "mad money."
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>> it is time! it is time for the lightning round on cramer's "mad money." that's about lightning, lightning, rapid-fire, rapid-fire. sell, sell, sell, my staff, pointing this out. and then the lightning round is over. are you ready skee-daddy! it's time for the lightning round on cramer's "mad money." i want to start with bob in illinois. bob? >> caller: hi, jim. thanks for taking my call. >> you're welcome, bob, how can i help, besides giving you a better football team? >> caller: yeah, really.
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a big, big boo-yah! >> oh, boy. >> caller: how about luv? >> sell, sell, sell! >> i never recommend on this show. i have recommended when they listen. you just had a big run on southwest. but you need to sell it. i need to go to olga in ohio. olga? >> caller: boo-yah to you from cincinnati. >> oh, man, the home of the selig family. and the bearcats. and playing with a bad back. he is doing fabulous. the bearcats are champs. what have you got? >> caller: well, first of all, you have been my idol for a few years. thank you so much for sticking up for the little guy. >> you're welcome. >> caller: express scripps -- >> because it wasn't mentioned in the health care bill, it went -- buy, buy, buy. >> hear is what you need to know. owns a big slug of express scripts. this company i think goes to 100.
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it saves companies money by all these orders. that's what the government really wants to do, rely on places like express scripts. so it's a winner. i need to go to -- could it really be? oh my fingers are crossed to deshawn in georgia. deshawn? >> boo-yah! >> deshawn, you're supposed to be in philadelphia, not georgia. >> caller: i'm on the plane already. >> all right, now you're talking. how can i help? >> caller: rm, regents financial. >> oh, they just got a new ceo. the other guy could not have been worse. anything is better than that guy. i want to buy regents financial and that changing of control in that ceo. i need to go to leonard in michigan. leonard? >> caller: yeah, jim, this is leonard from michigan. >> how are you, leonard? >> caller: okay. what do you think about ford motor company? >> i'll tell you what it is. it is a super duper buy. >> buy, buy, buy! >> it's an unbelievable buy.
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and i like the ford preferred even more. i got to tell you, a remarkable job. we should all be proud. you should be proud, i'm proud. this is really the great comeback story of all time. he would have been my man of the year, bernanke didn't exist. i think ford is going much higher! big numbers coming. i'm ignoring that buzzer because i really am having a great lightning round. can i go to kenny? oh, man, another guy in illinois. kenny? >> caller: boo-yah, jim, boo-yah. >> boo-yah-ski that. what's up? >> caller: ner, first merit corporation. >> oh, man, this one is starting to move. it has to be one of the stocks i recommend after a chapter of getting back to eden. first merit is a really well run bank in akron, ohio. they can make a lot of acquisitions. the fdic ought to pay close attention to them, because they're winners. i need one more. i need to go to john. oh my god, he is in georgia with deshawn. john? >> caller: jim! >> what's up? >> caller: southern university
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boo-boo-boo-yah! >> fantastic! great to have you on the show. how can i help? >> caller: apollo. >> no, too risky. >> sell, sell, sell. >> we don't want to be in that kind of college. i think it may be great for the people who study there, but for the stock, it's too high, too risky. i don't want touch it. what a bummer to have to end on apollo. but you know what? the lightning round is over! >> ten stocks for 2010, for children under 10. >> give them the perfect present for the holidays. >> only at madmoney.cnbc.com. what happened? i used to ask my broker for advice. funny how the "best" funds always turned out to be his.
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normally when we hear about a takeover stock and you acquire it and it gets pushed down. >> sell, sell, sell! >> in the rare exceptions when the news breaks and the stock goes higher, you can bet you've got a winner on your hands.
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today we had two of these. cramer fav mining equipment, up on the news it's buying mining equipment business and food maker treehouse, ths, is up $4.14, or 12% on the news that it's buying sturm foods, a private label hot food and powdered label company from a private equity firm. now treehouse is going to have to do an equity offering in order to pay for the deal. again, normally that causes stocks to get hit, right? the company raised guidance for the previous quarter so heartening that the stock soared. treehouse is an old hand at acquiring other company's brands and turning them around. they've done it with oxford foods, del monte soup, san antonio pharmacy, cd smith and each of the deals propelled the stock higher. in fact, treehouse with this acquisition, you know what it reminds me of? chattem. back in 2006 chattem acquired five brands at a fire sale price
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because regulators forced them to ditch them. in this deal ultimately catapulted chattem up much higher. chattem just got another bid today, santa fe adventist. i don't want to toot my own horn here or be shamelessly self-promotional. it's a pretty impressive gain. i always castigate myself for my failures. time to take profit on this one. the treehouse deal also reminds me of warner chilcott when it bought proctor's prescription drug business in august. stock up 72%. up 17% when i told you i thought there was still more upside. if i were you, would i buy treehouse now? listen, there is a secondary coming.
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that's where you'll get an unbelievable chance, and i want you in it. you buy it at a discount, just like i told you do buy warner chilcott, and just like i talk about in getting back to eden. you want in. sam reed is a proven moneymaker, proven, because the stock is up 41% since the last time we had him on the show. on march 11th when tree house was trading at $26.66. that's why i'm thrilled to have him back on tonight. mr. reed, welcome back to "mad money." >> jim, it's great to see you again. >> this is just an unbelievable acquisition, as the market knows. one of the things that surprised me, these are really much more name brand products than previous. can you think that's a fair thing to say? >> we've got two great product categories here. and powdered sugar-free drinks and hot oatmeal. and sturm is a leader in both categories behind two national brands. and we're delighted to have the position.
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>> now, do you need to have these brands be remade as store brand when i think the brands you bought are without a doubt the quality brands in the segment? >> well, their products are ideally suited for hour national private label and store brand network. and we will see great growth in the next year of their products as they go through our network to supermarkets all over. and in addition, we will benefit greatly from the innovation-based technology that sturm has, and they will provide was reciprocal benefits in our key and core categories. to quote you we struggled mightily to promote the
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shareholder value. after nearly two years of up and downs we were in a pickle and then what happened? what kind of luck did treehouse have? >> we really made our own luck out of great difficulty. we dedicated ourselveses to first of all, creating consumer value and private label without a compromise of quality or service. secondly, to find new businesses in great categories where there was expansion opportunity and great financial performance and when you put that together, jim, it spells "treehouse shareholder value." as you indicated, up over 40% since the last time i saw you. >> why does a stern come up for sale? great brands, i would think they'd want all the gains themselves. >> it's a great company on a stand-alone basis but it lacks the economies of scale and the
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distribution band width that a treehouse can bring it. and what we offer is farther reach, greater depth and being able to do so with greater efficiency throughout all channels of distribution to reach consumers and stores and markets across north america. >> something else seems to have happened that you may have lucked into, i don't know. we you used to think of generic as being some ugly thing you put in your cart and that meant to people, you're not doing so well. thanks changed, hadn't it? >> it's radically changed. we talk about customer brands now that are the brand property of grocery stores, mass merchandisers, other retailers and food service outlets. they are consistent track record is the growth that's twice that as the national brands over the last several decades. and the most astute marketers are applying consumer package goods techniques in developing
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lines of goods that have three tiers. three different house brands. three different price points and three different points of quality. and that is what is driving our business and private label as a general matter. >> one last question, sam. i got to keep it short. do you have any idea when the secondary will come? i don't want it to happen to the point where the people won't have a chance to get in. >> we'll close the transaction in march. >> in march, terrific. i'll keep this in front of people. i got to tell you, sam, you have been true to your word. thank you for coming on the show. nice gain today, congratulations. >> thanks a lot, jim. this one has been one i've been behind. i'm telling you there will be a secondary like the warner chillcott. i want you in on that secondary on treehouse. it is a winner. sam reid is a winner as he was with keebler. stay with "mad money." eeeee
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we're in that era of good feeling, period. whether i don't expect a lot of downgrades. i expect a lot of upgrades like we got today in tech. it's a nice time. don't sell. there's always a bull market somewhere and i promise to try to find it just for you. right here on "mad money." i'm jim cramer and i'll see you tomorrow.
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